Saban, which is known for being a long-term holder, and Campus Advantage plan to invest an additional $30 million to reposition and rebrand the assets. The improvements will be made to interior units, the exterior and amenities. After the capital improvements are completed and the properties are stabilized, the investors plan to own and operate the portfolio for the long term. Peter says, “We have a background as operator, so this partnership with a long-term holder like Saban fits in well with a management company like ours.”

LOS ANGELES—Los Angeles-based Saban Real Estate and Austin-based Campus Advantage have formed a new partnership to acquire a massive 19-property student-housing portfolio. The new partnership purchased the 12,083-unit portfolio for $508 million from American Campus Communities. The 19 properties are near major universities, including Penn State University, Michigan State University, Louisiana State University, University of Missouri, University of Indiana, University of South Carolina, University of Alabama, Florida State University, University of Alabama-Birmingham, East Carolina University and Western
Michigan University.

For Campus Advantage, this acquisition was all about timing. The investor recently disposed of another portfolio that it owned with CalSTRS, and wanted to recycle the capital. “This was a fantastic opportunity to recycle capital from recent dispositions that we went through with another capital partner of ours,” Mike Peter, president and CEO of Campus Advantage, tells GlobeSt.com. “We sold a number of assets in September, and we were able to roll that capital forward and recycle it into these assets. That made this transaction an incredible timing opportunity.” Campus Advantage owned the portfolio for 10 years with CalSTRS, and Peter says that it was time to “harvest the investments.”

With this acquisition, Campus Advantage has surpassed $1 billion in assets, pushing them into rank as the fifth largest student housing investment firm in the country. Last year the firm was the 10^th largest. Not only did this acquisition help give them a major boost; it also served to diversify both its investment partners and geographic markets. Before this acquisition, Campus Advantage typically partnered with pension and retirement funds. “This enabled us to bring an additional partner into the mix,” adds Peter. “That has created a great deal of stability for the company.”

In terms of geography, this acquisition has been a foray into new territory and secondary markets. “Our partners in the past have tended to focus on core assets, and these are not core assets. As a result, this has really helped to balance out our portfolio of core and non-core assets,” says Peter, adding that the asset type is also new for the firm. “These also represent what we call generation one and generation two-type assets, which are properties that were built in the 90s. They have a little different bed-to-bath ratio and unit mix and a different construction type. In a lot of ways, that is of great interest to us because we are finding a lot more value-conscious decisions being made by the consumer.”

Saban, which is known for being a long-term holder, and Campus Advantage plan to invest an additional $30 million to reposition and rebrand the assets. The improvements will be made to interior units, the exterior and amenities. After the capital improvements are completed and the properties are stabilized, the investors plan to own and operate the portfolio for the long term. Peter says, “We have a background as operator, so this partnership with a long-term holder like Saban fits in well with a management company like ours.”